Couple guilty of fraudulent HIV care

SCRANTON — A Shawnee-on-Delaware couple were convicted Thursday of operating a health care fraud scheme that preyed on AIDS patients at a Marshalls Creek clinic.

The jury returned its guilty verdict against Richard Harley, his wife Jacqueline Kube and Harley's company, Lazare Industries, after deliberating for six hours over two days.

The jury convicted Harley on 13 of 14 counts of conspiracy, mail fraud, wire fraud and distributing drugs not approved by the Food and Drug Administration.

Harley, 56, could be sentenced up to 64 years in jail and fined more than $4 million.

Kube was convicted of the one count of mail fraud, the only charge in the indictment against her. She faces up to five years in jail and a $250,000 fine.

Harley and Kube are free on bail.

Harley's conviction came nearly two years to the day after his first trial ended in a hung jury. The trial judge thendeclared a mistrial after a juror locked herself in the bathroom and refused to participate in the deliberations.

Harley's retrial was largely a repeat of the first trial.

Assistant U.S. Attorney Barbara Kosik Whitaker portrayed Harley as a con man adept in the art of double-talk.Harley, who represented himself at this trial, claimed to be a true believer in the benefits of ozone enemas and said he never intended to defraud anyone.

Harley claimed to have a patent for a device called an ozone generator, which he used to pump a mixture of ozone and oxygen into patients' rectums, charging $250 for a 30- to 45-second daily dose, or $7,500 for 30-day treatments. He also sold stock in his company.

Harley opened the House of Lazarus clinic in Jay Park Plaza in 1995. It closed earlier this year after he was evicted for not paying the rent.

U.S. District Judge Thomas I. Vanaskie tentatively scheduled sentencing for the week of Aug. 21 and ordered a background investigation on the couple.

Harley has a criminal record in New Jersey, according to court records.

In 1990, Harley was fined $1,000 and placed on probation for writing bad checks.

In 1980, Harley was fined $2,000 and placed on probation for three years and ordered to pay $11,277 in restitution to the victim of another scam, according to court records in Essex County, N.J.

Harley's AIDS clinic was nothing more than a scheme to defraud investors and patients, Whitaker said in closing arguments Wednesday.

Harley denied that was the case.

"There was no scam or scheme here to defraud anybody,'' Harley told the jury. "There was never any attempt to defraud anyone.''

Harley claimed his medically pure ozone "inactivated'' HIV, the virus that causes AIDS, and was also effective in treating a whole host of other medical conditions, including yeast infections, chronic sleep disorder, chronic fatigue and Gulf War syndrome.

Harley's promotional material claimed his treatments were proven to be safe and effective at a major hospital study conducted at St. Michael's in Newark, N.J.

The prosecution said the study was shut down by the FDA shortly after it started and produced no meaningful data.